BUSINESS
10/21/2011 08:14 EDT | Updated 12/21/2011 05:12 EST

B.C. shells out $30 million in settlement of mining company case

VANCOUVER - At a time when British Columbia's premier has staked her jobs agenda on a burgeoning mining industry, the province has agreed to hand over $30 million to one company in a settlement over what the company's president called "dirty dealings."

Boss Power Corp. and lawyers for the provincial government were scheduled to square off in court this month over the company's claim that the province had effectively expropriated its uranium deposit 50 kilometres northeast of Penticton without compensation.

Instead, lawyers for the government agreed to the pay out, saying in a news release earlier this week that B.C. had reached a legal agreement for Boss Power to surrender all claims to its uranium and mining rights.

The news release did not mention that in court documents, the province acknowledged its officials had deliberately ignored a so-called notice of work request, effectively grinding any exploration work on the company's uranium property to a halt.

Just days after the notice was filed in April 2008, B.C. announced an effective ban on uranium mining in the province.

Premier Christy Clark said Friday the settlement isn't the end of the legal action and that further legal action will likely arise as a result.

"What they (government officials) were trying to do is something that I think was something that was very much in line with public opinion in British Columbia, which was ban uranium mining," Clark said, adding she wasn't in government at the time

The facts agreed to by both parties in the court documents are potentially explosive.

The court statement noted the chief inspector of mines was told twice not to process Boss Power's work order.

The second time, the instructions were delivered despite legal advice from the Ministry of the Attorney General which concluded there was a statutory obligation for the chief mines inspector to consider the mine on its merits.

But the chief inspector was advised the notice of work should not be processed and approval for the work should not be granted.

The chief inspector was then removed from the file, the court documents show.

The court documents also show the subterfuge was probably unnecessary: The uranium site is surrounded by Crown land and developing it would have required permission for mining vehicles to cross it, permission that simply didn't have to be given.

"The issue at hand is $30 million of taxpayers money is going to a uranium mining company that may never have ever broken ground," NDP critic John Horgan said Friday.

"It's my view that had the inspector of mines been allowed to do his job, that the notice of work that was applied for would have taken years and years and years and may never well have come to fruition.

"If the government wanted to stop this, they could have done it for free."

Randy Rogers, president of Boss Power, said he and his officials were very frustrated by the government's actions.

"They refused to process my permits. They flat-out initially denied they even received my applications and then eventually admitted they had them and weren't going to do anything with them."

The retired RCMP officer said he did some of his own investigations around what had gone on and confronted the government.

"We turned up evidence of some, what could only be called dirty dealings, in the ministry office. And confronted with that evidence the province, through their lawyer, actually filed an admission in B.C. Supreme Court that the province had in fact interfered with our permits."

Last month, Clark unveiled a $300-million jobs plan that included promises of eight new B.C. mines by 2015 and nine upgrades to existing mining operations.

She didn't name any of the new mines, but spoke glowingly of the economic rewards and family-supporting jobs mines bring to B.C. communities, citing the recently reopened Copper Mountain copper mine at Princeton in the B.C. Interior.

The Association of Mineral Explorers of British Columbia issued a news release Friday saying it appreciated the province's decision to compensate when companies are barred from working on their tenure.

But the group's president, Gavin Dirom, also added that B.C.'s ban on uranium exploration is "an unsound public policy based on very little science and enacted without due process or public consultation."

The province has 196 uranium and thorium deposits, but there has never been an operating mine, the association said.